Minister for Financial Services Stephen Jones is supportive of the Quality of Advice Review recommendations that will allow super funds to provide financial advice to members amid an expected 5 million Australians in or approaching retirement in the next decade.
Speaking at a roadshow in Brisbane on Tuesday hosted by Investment Magazine parent company Conexus Financial in partnership with Allianz+, Jones recognised the current regulatory structure did not allow super funds to meet their obligations under the Retirement Income Covenant.
“You’ve got a statutory obligation to do something which another part of the law makes it almost impossible for you to do, so that needs urgent attention,” he said.
We have to turn our minds to ensure that we find ways that enable us to effectively and efficiently and in a cost-effective way enable that 5 million Australians a number to have access to the right sort of information and advice in a safe environment.”
Jones said while Australia’s $3.3 trillion pension savings is world class in terms of “how we accumulate retirement savings. That is very far from a world class retirement income system when we look at retirement income and distribution of those savings into retirement income products”.
Anecdotal reports from super funds show many of their members draw the minimum sum from their account balance, leaving behind significant amounts of money upon death.
Jones was keen to eliminate redundant regulation but felt more was needed beyond the review’s proposals and experience pathway to give more Australians access to affordable financial advice.
“I am absolutely committed to ensuring we pick and run with the recommendations of Michelle Levy’s important review, in addition to a bunch of other things we have running in the sector,” Jones said, although he hinted there is no intention to implement Levy’s proposals which were released last month in full.